|
North American auto suppliers know that if they want to win majorbusiness on future global car platforms, they must have a globalmanufacturing footprint. That same message is true for a growing Chinese auto supply basealso eager to expand globally. Chinese-owned Yanfeng USA Automotive Trim Systems Inc. is part of asmall but growing trend for Chinese firms going global, opening aninjection molding operation in the Detroit suburb of HarrisonTownship earlier this year to make door panels for General MotorsCo., and with plans to expand production next year for futurebusiness. "With industry globalization, General Motors and Ford and theothers want to do global sourcing," said David Wang, generalmanager of Yanfeng USA, in an Oct. 31 telephone interview."If Yanfeng doesn"t have a footprint here in NorthAmerica, it doesn"t have the ability to source on globalcars." Yanfeng is not alone. Pacific Century Motors, a joint venture ofthe Bejing Municipal Government and China-based investment groupPacific Century Automotive Systems, purchased GM's steering partsbusiness,Nexteer, in 2010. Metal auto parts supplier Wanxiang Group of Hangzhou, China, has anassembly and manufacturing base in Elgin, Ill. And the interest expands across multiple industries. "We"ve been devoting substantial efforts toparticipating and assisting Chinese companies in acquisitions herein the U.S., with investments, joint ventures and start-ups,"said Andrew Ross, a partner with New York-based law firm Loeb &Loeb LLP, which consults with both U.S. and Asian firms looking forconnections. "We think that from the perspective of Chinesecompanies, there are many good, strategic business reasons for themto engage in these transactions." For Yanfeng, the growing Detroit-area base is part of a naturalgrowth, Wang said. Yanfeng was a Shanghai tooling company which expanded into interiortrim products in 1983. In 1994, it created a joint venture withVisteon Corp. That venture, Yanfeng Visteon Automotive Trim Systems Co. Ltd., isnow estimated to be one of the 12 largest auto suppliers in China. Yanfeng and Visteon remain allied in global projects, but Yanfengis working independently for its new U.S. base. Its first foothold in North American delivery came in 2010 when itopened an assembly plant in Warren, Mich., turning out door panelsfor Chrysler Group LLC using parts manufactured in China. This year, it added molding to its U.S. base and opened themanufacturing plant in Harrison Township, Mich., starting with twoKraussMaffei presses. Wang said the company will add more pressesin early 2012 as its business continues to ramp up. In addition to its U.S. exposure, the company is consideringoptions to expand into Europe. "We want to be a global player in interiors," Wangsaid. Yanfeng USA has 120 employees now, and expects to hire more workersas it wins new business, he said. Not every auto supplier needs the global exposure, said MikeBenson, managing director of investment banking for consultinggroup Stout Risius Ross Advisors LLC of Southfield, Mich. Companiesspecializing in supplying second and third tier parts can focus onregional production. But firms like Yanfeng as well as European andNorth American competitors need to be on the ground in multiplelocations. That global focus will be good for the North American mergers andacquisitions business, tapping into a new source of potentialbuyers, Ross said. A Chinese strategic buyer may even pay a premium for a companylocated in the right place and with the right product and customermix. "They can gain a great deal," he said. And firms like Yanfeng are investing for long term growth, which isgood news for hourly employees and engineers alike, added JasonPivoz of accounting firm Mellen, Smith & Pivoz PLC of BinghamFarms, Mich. "They"re coming here with a presence to stay,"Pivoz said. "This is going to be a continued, lastingpresence. This is going to be a company that isn"t going tocome here for two years and pack up and leave." Yanfeng, as a new company, created an employment base for theregion that has helped replace some of the business and jobs lostduring the recession, he said. Many of the companies Ross has worked with are mid-market companieslooking for other mid-sized acquisition targets, he said. Some ofthose firms are also like Yanfeng, anxious to build their owncompany from the ground up and ready to navigate the local businessclimate. While only a small percentage of expansion in the U.S. has comefrom Chinese firms so far, Ross expects that number to increase.The Chinese national government is encouraging companies to"invest overseas in an orderly manner" as part of itslatest five-year plan. Growth will not be easy, though. "It"s going to require a learning curve on bothsides," he said. Chinese firms looking to invest in the U.S. will have to learnabout business practices in North America, just as North Americanfirms had to learn the proper process to building business in Chinain the past. Beyond the auto industry, Chinese firms are looking for investmentsin wind and alternative energy firms, aerospace, pharmaceuticalcompanies and the clothing industry, he said. "[Yanfeng] is not the first company that"s come overhere," Pivoz said, "and they won"t be thelast.". The e-commerce company in China offers quality products such as China Motor V Belt , China Industrial Timing Belts, and more. For more , please visit Industrial Timing Belts today!
Related Articles -
China Motor V Belt, China Industrial Timing Belts,
|
